Last week, we talked about fatal quoting mistake #1: treating every quote the same. The second mistake in our list of 7 fatal mistakes of quoting is a common consequence of doing just that: wasting your valuable time quoting low dollar value jobs.
It’s difficult to turn down a job. But over the span of one week, the average shop spends as much as $1,750 quoting jobs that they do not win. Too many of these businesses spend too much of their time working to provide quotes that simply won’t bring in enough revenue to justify the work.
Time spent quoting low-price jobs can contribute significantly to sunk costs. For example, if you spend an hour of your time quoting a job that yields a low return, you’re eating into the profits of what could have been, say, 10 jobs that you quoted during that same hour.
Here are 3 ways to avoid this fatal mistake of quoting:
- Understand the profitability of your time spent quoting. It’s important to understand the ROI of your time spent working on a quote. This can be accomplished by analyzing historical data and drawing comparisons between new and previously completed quotes.
- Leverage technology to reduce quoting time. Of course, the less time you spend on quoting, the higher the ROI of your time. Using technology can reduce the time it takes to quote, allowing you to quickly quote on the lower volume jobs that have the potential to turn into something more significant in the future. Technology can streamline the steps involved in costing, pricing and communication to significantly speed up the process.
- Nail your pricing methodology. Understanding your buyers and competitors helps you strategically price your time and products; if you are the only shop in a 100-mile radius that offers a specific technology or capability, you can assume that for certain jobs, you “own that market.” If that’s not the case, it’s important to know so you can price in a way that’s in line with shops with similar capabilities.
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At Paperless Parts, we empower job shops by automating their quoting process through modern technology. Our geometry-driven quoting, secure file-viewing and sharing capabilities, online collaboration and CRM tools, interactive digital quotes generator, and so much more, are helping manufacturers across the U.S. quote faster, win more work, and grow their business.
Curious about the third fatal mistake of quoting? Click here to find out.
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